October 19, 2003

‘Divisible Pool taxes are appropriated on the basis of NFC recommendations. This is basically done on the basis of population when it should be on the basis of revenue generation,’ argues Syed Sardar Ahmed

SINDH Finance Minister Syed Sardar Ahmed favours a balanced development strategy for the rural and urban areas in the province, and believes that raising the status of Hyderabad and Sukkur to the metropolitan level will help in improving the quality of life of the people.

Talking to Dawn Magazine recently, he said that the lack of availability of due share from the Divisible Pool was having a negative impact on the overall development strategy.

The following are excerpts from the interview:

Q. In view of the sharp urban-rural divide, what strategy for poverty reduction should be adopted in Sindh?

A. The strategy for poverty reduction is two-pronged, focussing both on urban and rural areas. We are very much conscious that the need to reduce poverty is much more in the rural areas than in the urban centres, because in the urban areas we have opportunities for employment, but in the rural areas most of the people heavily depend on agriculture. Unless we improve the agriculture sector or livestock, we will not be able to reduce poverty.

So we have devised a strategy to have more investment in agriculture both from the public and private sectors. From the public sector we are trying to provide maximum relief to the growers through distribution of loans for the purchase of inputs, which is very important. We also want to ensure regular supply of water so that the crops are not damaged and the yield is not curtailed.

In the private sector, we are attracting foreign investors, mostly overseas Pakistanis, who are willing to come and invest in the livestock sector. There is a lot of scope if the conditions are conducive and the government takes measures to provide relevant incentives. They will definitely come, and that is our strategy, because by such measures a lot of employment will be generated in the rural areas.

Similarly, in the urban areas, efforts are also being made. Recently, the chief minister constituted the Sindh Investment Board to attract foreign investment in rural as well as urban areas of the province.

Q. Karachi is said to generating one sixth of the country’s GDP. Yet the province suffers from poverty, very poor education, health and a civic infrastructure in tatters. Why?

A. In Karachi, the infrastructure responsibility rests on the shoulders of the provincial government, the municipal corporation and now the city district government. So the function is divided. It is a fact that because of severe shortage, adequate funds could not be released for these projects. But despite all these limitations, efforts have been made to improve the infrastructure in Karachi, and I think a lot of roads have been built, flyovers have been constructed, and the supply of potable water has been improved through the Karachi Water and Sewerage Board. Besides, improvement measures have also been initiated by the utilities. But we need more funds and efficient organizations to improve them further.

Q. To what extent resource transfer from Sindh on account of the federal fiscal structure is responsible for the prevailing situation?

A. It is an important issue, and we have been agitating about it with the federal government. As we all know, Divisible Pool taxes are appropriated by the provinces and the federal government on the basis of the recommendation of the NFC. Unfortunately, for the last two years the NFC could not be constituted and no recommendations have been made. The resolution adopted by the Sindh Assembly had called for reviewing the criterion for allocating shares of the provinces. This appropriation should not only be on the basis of population, but on the basis of revenue generation. So this is our plea that we are not receiving adequate resources despite generating huge revenues.

Sindh is generating about 60 per cent of the total Divisible Pool taxes, but, unfortunately, we are getting hardly 10 to 15 per cent out of that 60 per cent of the funds generated. When the next NFC is constituted, we will try to persuade the members and the government to allocate funds on the basis of revenue generation.

Q. Do you think that by raising the status of Hyderabad and Sukkur to metropolitan level — after including rural areas within the radius of, say, 30 kilometres — poverty could be reduced in these areas?

A. Yes, to some extent, it will definitely reduce poverty through such a structural change, and this should be given a serious thought. If the status of these two towns is raised to the metropolitan level I think there will definitely be some improvement in terms of infrastructure and services.

Q. The economic health of a society can be judged by the prevailing standard of education. Are you satisfied with it?

A. We have to provide maximum education to the people because if we cannot develop human resources, we cannot achieve economic growth. We have the experience of China and India where they focussed on primary education. And after educating the people they concentrated on building infrastructure. We are trying our best in this regard, and in our budget maximum allocation has gone to the education sector. Unfortunately, however, there are lots of lapses on the part of the administration. School buildings are there, but teachers are not around. If the teachers are there, they are not taking classes. A study is being undertaken to determine how many primary schools remained closed despite allocation of funds for these institutions. We will try to provide more schools and improve administration in the education sector.

Q. Is law and order responsible for impeding measures for poverty reduction?

A. To some extent, yes. But, again, law and order is created because of mass unemployment, with people having no jobs resorting to illegal means, and that creates a law and order problem. So it is a vicious circle. If we invest more towards providing job opportunities, criminal activities will be curtailed.

Q. Are you considering providing incentives to small-scale industries in the urban settlements to tide over this problem?

A. Certainly, because after the creation of the Sindh Investment Board we propose to hold a meeting and we will try to provide maximum facilities to the investors particularly in small industries by providing land on concessional rates, water, gas and other facilities through one-window operations.

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